3 Performance review options for startups

Jessica Miller-Merrell, blogging4jobsManaging a startup company is a tough job whether you are just breaking ground or growing quickly. There’s so much on-the-job training and such a learning curve, not to mention that you never know what each day will bring. Wearing many hats, you have to quickly become an expert and grow professionally in order to keep up. Many startups have the advantage of having leaders who have years of professional experience so not every problem that comes up is foreign but at the same time, you also have the freedom to leave everything you know behind and establish new solutions and traditions. That’s a major reason why the topic of performance reviews in startups elicits such a varied response.

January 9, 2014

Managing a startup company is a tough job whether you are just breaking ground or growing quickly. There’s so much on-the-job training and such a learning curve, not to mention that you never know what each day will bring. Wearing many hats, you have to quickly become an expert and grow professionally in order to keep up. Many startups have the advantage of having leaders who have years of professional experience so not every problem that comes up is foreign but at the same time, you also have the freedom to leave everything you know behind and establish new solutions and traditions. That’s a major reason why the topic of performance reviews in startups elicits such a varied response.

If you had a job before working at a startup company, you were almost certainly subject to some type of performance review, which you likely have an opinion about. It’s hard to have been subject to performance reviews and not view it in a certain way, whether that is negative or positive. As you formulate your plan for handling performance reviews in your startup, that experience will be invaluable in deciding what aspects you want to emulate and which ones could be improved upon.

Take a look at these three types of performance reviews that might be right for your startup:

Periodic, scheduled reviewsPeriodic, scheduled reviews are the more traditional approach to performance reviews and are typically conducted annually or bi-annually. If you came from a corporate background before you began at a startup company, this is probably what you associate with performance reviews. This format has its positives and negatives, but it’s not right for every company. Some of the positive aspects of this type of performance review are the fact that reviews are more likely to be consistent and they tend to be less time consuming than the approaches below. On the other hand, this type of review tends to be less effective at improving performance and may be more stressful for employees undergoing review.

Continuous reviewContinuous review as an approach to performance reviews is one that tends to be extremely effective at coaching employees to success and seeing marked improvement. It requires consistent feedback from managers so it does tend to be a bit time consuming, though it may save time in the long run. With this format, meetings may still be established, such as weekly or bi-weekly, but it’s much less structured than the approach above. It is important to have a prescribed format for how managers will conduct continuous reviews, so developing a form or general outline will be beneficial.

Side-by-side reviewThe side-by-side approach is ideal for startups but does require more time and effort than the other methods. Using this type of performance review, managers and employees work every closely, consistently learning and gaining feedback on a daily basis. The reason this type of performance review works well in startups is that the environment lends itself to significant cross training as staffing may be limited, continual development as the company grows and a smaller number of employees, making it possible to interact with employees often. This format does present the possibility of employees not receiving effective or constructive feedback, so it must be a part of the culture of your startup if you go with this method. In addition to sharing feedback with employees, managers should also keep their own notes on the performance of each employee so they are able to review them when needed.

How does your startup handle performance reviews? Let us know in the comments section below.